Centamin plc Results for the Third Quarter and Nine Months Ended 30 September 2018

Transcription

1 For immediate release 1 November Centamin plc ("Centamin" or "the Company") (LSE:CEY, TSX:CEE) Centamin plc Results for the Third and Nine Months Ended Financial Highlights (1,2,3,4) Q3 compared with Q2 Sukari Gold Mine ( Sukari ) produced 117,720 ounces, a 27% improvement on the second quarter ( Q2 ) QoQ, resulting from month on month operational improvements in the open pit and underground; Gold sales of 106,798 ounces, a 9% increase QoQ. The increased difference between gold produced and gold sold is due to the timing of final month end gold pour and the gold shipment schedule; The 20,163 unsold ounces were sold at the next shipment, contributing to fourth quarter ( Q4 ) revenue; Average realised gold price of US$1,206 per ounce, a decrease of approximately 7% QoQ; Revenue of US$125.1 million, a 1% increase QoQ, due to the 9% increase in ounces sold offset by 7% decrease in gold price; Revenue of US$421.5 million generated YTD from gold sales of 328,433 ounces (Excl. Cleopatra ounces) at an average realised gold price of US$1,281 per ounce; EBITDA (1,2,4) of US$48.7 million, a 6% increase QoQ, resulting in EBITDA of US$178.5 million YTD; Profit before tax (4) of US$21.8 million, a 1% decrease QoQ, and US$102.2 million YTD; Basic earnings per share after profit share (2,4) ( EPS ) of 0.93 US cents, a 29% decrease QoQ, largely reflecting the Sukari profit share mechanism as per the Concession Agreement with Egyptian Minerals Resources Authority ( EMRA ), Centamin s state partners, which from July moved from a ratio of 60:40 to 55:45 (Centamin:EMRA); YTD EPS of 4.80 US cents; Operational cash flow of US$27.3 million, a 27% decrease QoQ, due to the factors mentioned above and an 8% increase in operating costs driven by increased volumes of material moved; Operational cash flow YTD of US$150.0 million; Royalties of US$3.9 million payable to Arab Republic of Egypt ( ARE ) and profit share of US$10.6 million paid to EMRA, resulting in a US$62.7 million YTD direct financial contribution to Egypt; Sustaining capital expenditure of US$21.8 million, a 24% decrease QoQ; YTD capital expenditure of US$75.7 million; Negative Group free cash flow (1) of US$1.0 million, largely driven by timing of gold sales resulting in increased bullion inventory and the phased Sukari profit share mechanism, referred to above; Group free cash flow generated YTD is US$35.1 million; Cash and liquid assets (1,3) of US$292.2 million, at, after payment of the interim dividend of US$28.9 million (2.5 US cents per share) on 28 September ; and The Company remains debt-free and unhedged. on quarter comparative units Q3 Q2 % change Q3 Year on year comparative % change 9 months 30 Sept. YTD Gold produced oz 117,720 92, ,533 (25) 334,819 Gold sold oz 106,798 97, ,273 (29) 335,470 Cash cost of production (1,2) US$ ,874 64, ,658 (6) 206,816 Unit cash cost of production US$/oz produced (13) AISC (1,2) US$ , ,211 (10) 109,952 (16) 301,206 Unit AISC (1,2) US$/oz sold 889 1,073 (17) Average realised gold price US$/oz 1,206 1,298 (7) 1,283 (6) 1,281 Revenue US$ , , ,092 (35) 421,518 EBITDA (1,2) US$ ,746 45, ,155 (50) 178,474 Profit before tax (4) US$ ,836 21,977 (1) 70,003 (69) 102,212 Basic EPS (2) (4) US cents (29) 2.96 (69) 4.80 Sustaining capex incl. Sukari exploration (4) US$ ,812 28,798 (24) 24,296 (10) 75,689 Operating cash flow (4) US$ ,303 37,247 (27) 104,737 (74) 149,963 1

2 Free cash flow (1) (4) US$ 000 (989) 1,594 (162) 45,625 (102) 35,085 Operational Highlights (1,2) Q3 compared with Q2 Group Lost Time Injury Frequency Rate ( LTIFR ) of 0.13 per 200,000 man hours, with one lost-time injury in Q3, a reflection of our ongoing focus and commitment on health and safety; Sukari Gold Mine ( Sukari ) produced 117,720 ounces, a 27% improvement QoQ, resulting from month on month operational improvements in the open pit and underground; September was a significant improvement on July and August, producing 48,511 ounces, driven by good underground grades and reduction in stope dilution; Underground operational improvements have taken longer than planned to materialise and are expected to continue to flow through in Q4; Group production for the first nine months, year-to-date ( YTD ) is 334,819 ounces; Cash costs of production (1,2) of US$70.9 million, a 10% increase QoQ, primarily driven by increased volumes of material movement, in particular the combined mining stockpile build-up of US$32.7 million, due to increased material mined from the open pit, offsetting a collective stores inventory reduction of US$10.9 million; Unit cash cost (1,2) reduced by 13% QoQ to US$619 per ounce produced, driven by increased production; Unit cash costs YTD are US$631 per ounce produced; AISC (1,2) of US$92.1 million, a 10% decrease QoQ driven by an increase in inventory (stockpiles and bullion in safe) and scheduled reduction in sustaining capital expenditure over the period. Maintenance and equipment rebuild programmes are on schedule; Unit All-in sustaining costs ( AISC (1,2) ) reduced 17% QoQ to US$889 per ounce sold; Unit AISC YTD are US$917 per ounce sold; Record open pit material movement of 19.9Mt, an 8% increase QoQ, totalling 56.8Mt YTD, including record open pit ore mined of 6.6Mt, a 19% increase QoQ, totalling 18.1Mt YTD as mining of the Stage 4 transitional zone was completed and progressed into the higher-grade sulphide material, the predominant source of ore from the open pit for the next three years. Open pit average milled grade was 0.81g/t, a 37% increase QoQ, and lifting the average milled grade YTD to 0.70g/t; The run of mine ( ROM ) ore stockpile increased from 6.45Mt (at 0.44 g/t) at the end of Q2, to 10.13Mt (at 0.47g/t) at the end of Q3, a 57% increase in tonnes QoQ, with 8.0Mt at 0.42g/t now classified as longer term stockpiles; Total underground ore mining of 327kt, a 13% increase QoQ, at an average mined grade of 5.18 g/t, a 12% increase QoQ due to the successful ongoing implementation of changes initiated in Q2, in particular the reduction in tonnes impacted by dilution from cascade stoping; YTD 928kt ore mined at an average mined grade of 5.52gt; There has been no underground equipment utilisation or availability disruptions; the backup long-haul drill rig ( LHDR ) is in transit and expected to arrive on site in Q4; and Plant throughput of 3.1Mt, a 1% reduction QoQ, at a head grade of 1.29g/t, a 31% increase QoQ. Exploration Highlights (4) The Group exploration programme has delivered strong results across the portfolio in Q3. A comprehensive drilling programme at the Sukari underground continues to return excellent results; These results, whilst outside the existing Mineral Resource, are largely near to existing development and infrastructure thereby expanding the structural architecture of the orebody and in turn, supporting increased mine life potential. Drill highlights include: Ptah: Amun: Top of Horus: 428 g/t 8.2 g/t, including 12 g/t 8.5 g/t 8.1 g/t 20.4 g/t 106 g/t 9.26g/t 9.9 g/t, including 10.5 g/t 180 g/t, including 259 g/t 51.9 g/t 25.8 g/t, including 20 g/t 15.9 g/t, including 563 g/t 18.9 g/t, including g/t 213 g/t 26 g/t g/t Cleopatra exploration continued to return solid results, as further drilling systematically tested the contacts and internal geological structures during the quarter. Drill highlights include: 2

3 g/t 6.3g/t, including 9.3g/t 12.8 g/t 11.5 g/t 9.5 g/t 3.9 g/t 5.4 g/t 3 g/t 3.9 g/t Total spend of US$2.8 million on Cleopatra exploration and development has generated pre-production revenue of US$2.7 million; West Africa exploration expenditure (4) was US$4.7 million, progressing the Doropo Preliminary Economic Assessment ( PEA ) study, which is on schedule for H1 2019, and further drilling at ABC Project targeting a maiden resource; and Doropo Project, Côte d Ivoire, resource extension and infill drilling returned positive results. Drill highlights include: Nopka deposit: 6.4 g/t 2.7 g/t 6.5 g/t 6.4 g/t 9.4 g/t Chegue South deposit: 8.4 g/t 9.7 g/t 5.5 g/t 10.7 g/t Kekeda, Enioda, Hinda, Tchouahinin deposits: 11.2 g/t 30.5 g/t 16.1 g/t 5.8 g/t 8.1 g/t 19 g/t ABC Project, Côte d Ivoire, early stage reconnaissance exploration has identified some very encouraging mineralised zones. Drill highlights include: Kona Project: 2.5 g/t 0.8 g/t 1.2 g/t 1.4 g/t 1.5 g/t 0.8 g/t Q4 Update and Guidance To date, in Q4, operational sections are performing in line with the plan and the Company remains on track to produce 145,000 ounces; Whilst the Company continues to realise further improvements from the underground, production guidance for has been revised to 480,000 ounces; Notwithstanding the reduced annual production profile, the cash cost of production guidance remains unchanged with unit cash cost of production on track to deliver between US$625-US$640 per ounce produced, resulting from a positive impact from increased inventory; The Company expects AISC per ounce sold to continue to trend downwards in Q4 and expects to be at the top end of the guidance range of US$875-US$890 per ounce sold, and benefitting from the unsold ounces at the end of Q3 and therefore we expect gold sales to exceed gold produced; Reduced total capital expenditure to US$125 million; and Updated Sukari Mineral Reserve and Resource estimates scheduled to be published with year-end results. (1) Cash cost of production, AISC, EBITDA and cash, bullion on hand, gold sales receivables, financial assets at fair value through other comprehensive income and free cash flow are non-gaap measures and are defined at the end of the Financial Review section. (2) Basic EPS, EBITDA, cash cost of production and AISC reflect a provision against prepayments to reflect the removal of fuel subsidies which occurred in January 2012 (refer to note 8 of the financial statements for further details). (3) Cash and cash equivalents, bullion on hand, gold sales receivables and financial assets at fair value through other comprehensive income. (4) The Group accounting policy for Greenfield exploration expenditure, has been updated in line with market practice. This has resulted in prior period results being restated. Accordingly, YoY comparatives are on a consistent basis. For full details, please refer to Note 1 of the Financial Statements. 3

4 Conference Call A conference call will be hosted by the Company at GMT (UK) today to discuss the results with investors and analysts. Please find below the required dial-in details. Where possible, please dial in 10 minutes before. The Results Presentation can be found on the Company website: ahead of the call. Participant code: # UK Toll: +44 (0) UK Toll-Free: A replay will be made available on the Company website from GMT (UK) today for 30 days. For further information, please visit the website or contact: Centamin plc Andrew Pardey, Chief Executive Officer Alexandra Carse, Investor Relations alexandra.carse@centamin.je Buchanan Bobby Morse Chris Judd centamin@buchanan.uk.com 4

5 CHIEF EXECUTIVE OFFICER S REVIEW These results demonstrate a material operational improvement on Q2. We are extremely pleased with the operational performance from the open pit and were pleased to see the underground returning towards expected production levels. The open pit, following another record quarter for material moved, is now through the transitional ore, grades are improving and are expected to continue to improve throughout Q4. The underground has shown month on month improvements throughout Q3, with production contribution from cascading stopes declining from 49% in Q2 to 34% in Q3 as stopes in upper Amun levels were progressively completed. By September, cascade stopes contributed less than 20% of production ore as higher-grade stopes were commenced in the Amun zone along the western contact. There are additional modifications underway as we return operations to their steady state. We are committed to maintaining a tight cost base, with costs remaining firmly in the bottom half of the global gold producing cost curve with unit cash costs of production of US$619/oz and all-in sustaining costs of US$889/oz, down 13% and 17% QoQ, respectively, despite sector wide supply chain pressures. This has underpinned what is a profitable business, generating US$21.8 million for Q3 (US$102.2 million YTD) in what has been a sustained weak gold market. The build-up in stockpiles has helped to reduce costs which have been further contained by improvements to fleet scheduling and utilisation, resulting in less trucks per unit moved, ongoing improvements in working capital, negotiation of improved commercial terms on some key supply contracts and deferral of non-critical sustaining capex items. Of note, fuel costs have been stable for the quarter. The Company maintains a strong financial position, with cash and liquid assets of US$292.2 million as at, after paying out US$28.9m for the interim dividend. Group free cash flow was negative US$1m for the quarter, after generating US$27.3m in operating activities, investing US$17.7 million in sustaining and exploration capex and distributing US$10.6 million to our local partners, EMRA, in profit share. We expect Q4 to be highly cash flow generative, including the benefit from the unsold ounces produced in Q3, where we expect gold sales to exceed gold produced. The exploration programme has returned another quarter of strong results. Sukari is a world class asset with untapped growth potential as demonstrated by the continued excellent high-grade underground drill results in Q3. The underground drill results largely sit outside of the existing Sukari resource, yet are near to current underground development. Some of the results are also from less well understood extensions to the orebody, generating ample drill targets for Q4 and beyond. We look forward to providing our updated reserve and resource numbers with year-end results. At Doropo in Côte d Ivoire, the Preliminary Economic Assessment is on track for H Geotechnical and hydrological studies are complete with the full metallurgical studies scheduled for completion in Q4. Environmental and community studies are underway and are scheduled for completion in H along with the updated resource estimation. Based on ongoing drilling and work done to date, the Doropo Project is demonstrating increasing potential to be Centamin s next development project. During the quarter, we were delighted to welcome Dr Ibrahim Fawzy to our Board as Independent Non-Executive Director and Raitt Marshall as General Manager of Sukari Gold Mines. Raitt brings a wealth of experience and joins us from Kinross Gold, where he was the General Manager of Tasiast Gold Mine, Mauritania. Centamin s corporate strategy remains focused on the delivery of low cost operations at our world class Sukari Gold Mine; from this solid foundation we are able to generate significant cash flow, driving shareholder returns whilst simultaneously progressing multiple stages of future potential growth within our exploration and development pipeline. 5

6 OPERATING REVIEW Open pit mining on quarter comparative units Q3 Q2 % change Year on year comparative Q3 % change 9 months 30 Sept. YTD Total material mined kt 19,891 18, , ,802 Ore mined kt 6,562 5, , ,141 Ore grade mined g/t Au (16) 0.55 Ore grade milled g/t Au (27) 0.70 Strip ratio waste/ore (13) 2.86 (29) 2.13 Underground mining Amun/Ptah Ore mined from stoping kt Ore mined from development kt Ore grade mined g/t Au (35) 5.52 Processing Ore processed kt 3,129 3,172 (1) 2, ,370 Head grade g/t Au (29) 1.20 Gold recovery % Gold produced - dump leach oz 3,894 3, , ,077 Total gold production (1) oz 117,720 92, ,533 (25) 334,819 Cash cost of production (2,3) US$'000 70,874 64, ,658 (6) 206,816 Unit Cash cost of production (2,3) US$/oz (13) AISC (3) US$'000 92, ,211 (10) 109,952 (16) 301,206 Unit AISC (3) US$/oz 889 1,073 (17) Gold sold oz 106,798 97, ,273 (29) 335,470 Average realised sales price US$/oz 1,206 1,298 (7) 1,283 (6) 1,281 (1) Gold produced is gold poured and does not include gold-in-circuit at period end. (2) Cash cost of production exclude royalties, exploration and corporate administration expenditure. Cash costs of production reflect a provision against prepayments to reflect the removal of fuel subsidies which occurred in January 2012 (refer to note 8 of the financial statements for further details). (3) Cash cost of production and all-in sustaining costs are non-gaap financial performance measures with no standard meaning under GAAP. Please see the financial review for details of non-gaap measures. Health and safety The Group Lost Time Injury Frequency Rate ( LTIFR ) for Q3 was 0.13, with one lost-time injury over a total of 1,590,855 man hours worked. The Company remains committed to further improving this health and safety measure towards our zero harm target with details of the safety initiatives and employee welfare set out in the CSR report, which can be found on our website Sukari Gold Mine, Egypt Overview Sukari had one lost-time injury over 1,441,307 man hours worked in Q3, resulting in an LTIFR of The site continues to focus on leading indicators such as hazard reporting and regular routine training. Sukari produced 117,720 ounces in Q3, a 27% increase on the previous quarter, reflecting operational improvements across all sections of the mine. Significant month on month improvements delivered total production for September of 48,511 ounces, more than a 50% increase compared to July production. This was due to mining of the high-grade stopes along the western contact in the Amun zone and some small high-grade stopes in the Ptah sediments. Whilst many of the changes implemented in Q2 successfully resulted in improved performance, focus firmly remains on realising further improvements and ensuring consistency of performance. Open pit mining of the transitional zone was completed in the quarter, with mined grades improving month on month, slightly ahead of expectations. Underground operations delivered the most improved month on month performance, with September production of 23,601 ounces greater than 70% increase compared to July production. Underground stope production continued to improve during the quarter, although slower than expected, as cascade stopes in the upper levels were completed and progressively replaced with higher grade stopes with lower dilution. In addition to completing a number of cascade stopes in July and August, there were some issues opening up new stopes in August which were resolved by the end of the month, enabling September to record a much-improved performance. 6

7 OPERATING REVIEW Open pit The open pit delivered a total material movement of 19.9Mt. A total of 6.6Mt of ore was mined at 0.64g/t, of which 2.7Mt was milled at an average head grade of 0.81 g/t; 189kt at 0.35 g/t was delivered to the dump leach pad; the balance of approximately 3.7Mt at 0.52g/t was delivered to the stockpiles. The run of mine ( ROM ) ore stockpile at the end of Q3 was 10.1Mt at 0.47g/t, with 8.0Mt at 0.42g/t now classified as longer term stockpiles; The open pit achieved another record quarter for ore mined and material moved. Additional ore tonnes were mined at medium grade slightly ahead of expectations. More ore tonnes were delineated from the grade control drilling, as we mined into the sulphide material. Open pit mined grade for Q3 was 0.64 g/t, a 25% improvement QoQ, with September grade of 0.74 g/t, a 29% increase on July. In line with the mine plan, ore mining reduced in September with 17% less ore tonnes mined than in July. Stage 4 mining is now into the higher-grade sulphide material, which will be the primary source of ore for at least the next three years. In Q4, the mine plan forecasts lower tonnage at higher grades of ore mined, as mining in the sulphides progresses at depth. Underground The underground delivered ore mined of 327kt, at an average grade of 5.18 g/t for the quarter; of which 199kt at 6.16 g/t was from stoping and 128kt at 3.65g/t was from development. The ratio of stoping-to-development ore for the period was 60:40. There have been no material equipment utilisation or availability issues and the backup LHDR is in transit and expected on site in Q4. During Q3, the total tonnes mined from cascade stoping reduced from 49% to 34%, as mining commenced in the lower levels of the Amun zone where conventional open stoping is the suitable mining method for that section of the orebody. Stope production in Amun amounted to 155kt at 6.71g/t, whilst development was 47kt at 3.18g/t. In the Ptah zone, stope production amounted to 44kt at 4.37g/t, whilst development was 81kt at 3.94g/t. In Q4, approximately 15% of total stoping tonnage scheduled is exposed to increased dilution due to cascading material. The underground mine plan schedules for stoping to development in a split of 60:40. Total underground development was 1,759m, a 2% decrease QoQ. Decline development contributed 88m, with the remainder ore drive and cross-cut development in the Amun (593m) between 590 and 695 levels and Ptah (1,078m) on the P615 to P700 levels. Development in Q4 is forecast at 2,000m, of which 450m is waste in the Ptah and Horus (below Amun) declines. Processing The plant processed 3.1Mt of ore at a head grade of 1.29g/t, a 31% increase QoQ, in line with annual budget expectations. Metallurgical recovery averaged 88.7%, a 1.6% improvement on the prior quarter. Cleopatra decline development in mineralised material produced 3,223 ounces. The dump leach operations produced 3,894 ounces. Sukari Exploration Exploration primarily focused within the mine site, to further unlocking underground resource potential at Amun, Ptah, Cleopatra and Top of Horus. A total of 9,286 diamond drill metres were completed, targeting Amun near development reserve and resource extensions, Cleopatra and Ptah resource drilling and Top of Horus extensions. A further 10,000 metre drill programme is underway for Q4. Amun / Ptah During Q3, exploration within the Amun zone was focussed on resource extension along the southern strike of the mine. A total of 1,783 metres were drilled from the Amun 650 level, targeting reserve and resource extensions within the Osiris flat structure and resource extensions to the south of the Top of Horus zone. The Osiris zone is characterised by a major, low-angle thrust rotating the major W-WNW gently dipping porphyry block. The main highgrade veins occur on the upper and lower contacts of the porphyry with high-angle steeper dipping secondary veins ramping up, linking through to the western porphyry contact. The Top of Horus, forms on the contacts and develops within the steeply dipping Horus porphyry. The Top of Horus high grade veins are typically high-angle dipping towards the Northwest. This structural setting, where the low-angle Osiris thrust caps and possibly shifts laterally the top of the sub-vertical Horus porphyry, is open up and down plunge along strike. Results confirmed the high-grade consistency along the southern and western extension of the Osiris zone. This is proximal to the current decline development drives and outside the existing reserve and resource. Top of Horus zone is still open to the south with higher grade located at the brecciated contact. More drilling is required but this is an area of high potential for reserve and resource growth. 7

8 OPERATING REVIEW Table 1. Amun Underground Exploration Significant Drill Intercepts - Q3 Highlights TENEMENT ID PROSPECT ID HOLE ID Level (mrl) Interval (m) Grade (Au g/t) SUKARI GOLD MINE AMUN UGRSD SUKARI GOLD MINE AMUN including SUKARI GOLD MINE AMUN UGRSD SUKARI GOLD MINE AMUN including SUKARI GOLD MINE AMUN UGRSD SUKARI GOLD MINE AMUN UGRSD SUKARI GOLD MINE AMUN including SUKARI GOLD MINE AMUN UGRSD SUKARI GOLD MINE AMUN SUKARI GOLD MINE AMUN UGRSD SUKARI GOLD MINE AMUN SUKARI GOLD MINE AMUN UGRSD SUKARI GOLD MINE AMUN SUKARI GOLD MINE AMUN During Q3, the Company completed more than 3,800m of drilling in the Ptah zone with the focus on resource definition drilling and infill drilling on the Ptah Keel as well as the ongoing exploration drilling to support the current underground development in front of and below P605/P615 at Western contact and below P660 at Eastern contact. Drilling from Ptah 660 level, and later in September from Ptah 735 level, where a second rig commenced drilling, targeted the Ptah East Contact Stockworks Zone, Ptah West Contact Stockworks Zone, Ptah Western Contact High-grade Quartz-Veins and the Ptah Keel. Results demonstrated grade continuity along the North-South strike of the ore zones on both the Eastern and Western Contacts. The quartz lodes on the Western contact remain a very prospective high-grade zone where the interaction between Hapi structure with western contact shear. Porphyry Keel drill results confirm resource extension potential at depth towards the north. Table 2. Ptah Underground Exploration Significant Drill Intercepts - Q3 Highlights TENEMENT ID PROSPECT ID HOLE ID Level (mrl) Interval (m) Grade (Au g/t) SUKARI GOLD MINE PTAH UGRSD SUKARI GOLD MINE PTAH UGRSD SUKARI GOLD MINE PTAH including SUKARI GOLD MINE PTAH UGRSD SUKARI GOLD MINE PTAH UGRSD SUKARI GOLD MINE PTAH UGRSD SUKARI GOLD MINE PTAH UGRSD SUKARI GOLD MINE PTAH UGRSD SUKARI GOLD MINE PTAH SUKARI GOLD MINE PTAH SUKARI GOLD MINE PTAH including SUKARI GOLD MINE PTAH SUKARI GOLD MINE PTAH UGRSD SUKARI GOLD MINE PTAH SUKARI GOLD MINE PTAH SUKARI GOLD MINE PTAH UGRSD SUKARI GOLD MINE PTAH UGRSD SUKARI GOLD MINE PTAH

9 OPERATING REVIEW SUKARI GOLD MINE PTAH SUKARI GOLD MINE PTAH SUKARI GOLD MINE PTAH UGRSD SUKARI GOLD MINE PTAH PUD SUKARI GOLD MINE PTAH PUD SUKARI GOLD MINE PTAH UGRSD SUKARI GOLD MINE PTAH UGRSD SUKARI GOLD MINE PTAH PUD SUKARI GOLD MINE PTAH PUD SUKARI GOLD MINE PTAH PUD SUKARI GOLD MINE PTAH PUD SUKARI GOLD MINE PTAH PUD SUKARI GOLD MINE PTAH PUD SUKARI GOLD MINE PTAH PUD SUKARI GOLD MINE PTAH The drilling from the Ptah P660 and P735 levels is currently targeting the Eastern and Western contacts in Ptah to convert and extend our reserves to the North and South. The Porphyry-keel remains a potential target for resource growth with further infill drilling planned for the North extension. Amun exploration remains focussed on resource growth and testing extensions along the southern strike of the mine. In Q4, drilling will focus along the structural contacts at Osiris and top of Horus zones, with the aim to unlock the underground resource potential to South. Cleopatra Exploration Decline The Cleopatra Zone consists of a set of three stacked, northwest dipping mineralised zones in the northern section of Sukari, named from surface as Cleopatra, Antony and Julius. Exploration continues to focus on the development and exploration of the Upper Cleopatra Zone to provide more detailed geological information and establish drill platforms targeting the Lower Cleopatra, Antony, Julius, Ptah Keel and Ptah Deeps ore zones. During Q3, Cleopatra exploration completed 865m of development extracting 70,897 tonnes of mineralised development ore at an average grade of 1.6 g/t, producing 3,223 ounces. Cleopatra exploration drilling continues to test the contact zones and at depth. One LM90 rig operated full-time drilling Cleopatra, completing 3,683 metres from the C 1150RL S2 platform. The principle focus of the Q3 program was targeting the high-grade mineralisation on the eastern contact ahead of the Antony Decline along the southern strike and the high-grade extension of the northern end of the Keel spine expressed there as the Ptah Deeps. Results received from the Antony infill drilling show medium-grade near the eastern contact along the North-South strike of the zone. Other intercepts show both Cleopatra zone and Antony zone extensions are open down dip to the west. Table 3. Cleopatra Exploration Decline Underground Exploration Significant Drill Intercepts - Q3 Highlights TENEMENT ID PROSPECT ID HOLE ID Level (mrl) Interval (m) SUKARI GOLD MINE CLEO CRSD SUKARI GOLD MINE CLEO CRSD SUKARI GOLD MINE CLEO CRSD SUKARI GOLD MINE CLEO SUKARI GOLD MINE CLEO CRSD SUKARI GOLD MINE CLEO CRSD SUKARI GOLD MINE CLEO SUKARI GOLD MINE CLEO CRSD SUKARI GOLD MINE CLEO CRSD SUKARI GOLD MINE CLEO CRSD SUKARI GOLD MINE CLEO SUKARI GOLD MINE CLEO CRSD Grade (Au g/t) 9

10 OPERATING REVIEW SUKARI GOLD MINE CLEO SUKARI GOLD MINE CLEO CRSD SUKARI GOLD MINE CLEO SUKARI GOLD MINE CLEO CRSD SUKARI GOLD MINE CLEO SUKARI GOLD MINE CLEO SUKARI GOLD MINE CLEO CRSD SUKARI GOLD MINE CLEO CRSD SUKARI GOLD MINE CLEO SUKARI GOLD MINE CLEO SUKARI GOLD MINE CLEO SUKARI GOLD MINE CLEO Sukari Tenement Area Sukari is a gold deposit hosted on a major Arabian Nubian Shield terrane boundary. The Sukari Resources are currently drill defined around the 2.7km long by 0.6km deep Sukari porphyry that sits axially within a much wider 17km long by 3.7km ophiolite shear zone. There are 7 surface prospects hosted along this trend within the license. All surface prospects are within trucking distance to the existing processing plant and infrastructure, In Q2 initial work commenced to construct a robust district 3D geo-seismic architecture of the license area to depths greater than 1.5km, targeting potential new Sukari-style porphyries. During Q3, detailed preliminary work was completed to calibrate the technology with the ground conditions and Sukari core. This is to be followed by further down the hole ( DTH ) geophysics in Q4 and to then begin 2D seismic sections in Q

11 EXPLORATION REVIEW Cote d Ivoire The Company has eleven exploration permits, covering circa 3,472km 2 land holding and a further ten permits under application. During the quarter, the exploration team achieved zero lost-time injuries over a total of 135,090 man-hours worked during Q3. The overall exploration work focussed on resource growth as well as on extending the surface detailed geochemistry coverage at both the Doropo Project and the ABC Project. Doropo Project At Doropo drilling focused on the end of year resource upgrade targeting the shallow mineralisation along the Enioda, Tchouahinin, Hinda and Chegue structures and elevating the classification in the core of the two main reserve blocks at Nokpa and Souwa to support the forthcoming PEA study in H A total of 15,970m of RC and 6,543m of auger drilling was completed. The RC drilling was conducted on the Kalamon and Danoa permits and the auger drilling on the Tehini 1 and Tehini 2 permits. Following encouraging preliminary test work on the oxide material, full laboratory metallurgical results will be received in Q4. The Nokpa deposit is one of the key deposits in the resource update. The drilling completed in Q3 focused on resource expansion. Some of the intercepts include 10m at 6.4 g/t (from 26m downhole depth), 12m at 6.5 g/t (from 69m downhole depth), 40m at 2.7 g/t (from 71m downhole depth) and 37m at 6.4 g/t (from 70m downhole depth). The Chegue South resource was ext southward during the quarter, with the discovery of several new mineralised shoots of high grade hidden under a thin veneer of barren, transported alluvium, that masked the original surface signature. The mineralisation extends from surface and includes intercepts up to 15m at 8.4 g/t (from 12m downhole depth) and 9m at 9.7 g/t (from 13m downhole depth). The Chegue Main resource was composed of two main mineralised shoots plunging off a 2 km section of a regional 060 o trending shear zone. In, a further three new mineralised shoots have been identified between the existing mineralised shoots which the shoots into one continuous, coherent deposit. The shoots are stacked parallel, plunging shallowly towards 330 o WNW and extend from surface. Representative intercepts include 15m at 1.9 g/t (from 50m downhole depth), 7m at 2.2 g/t (from 43m downhole depth) and 11m at 5.5 g/t (from 46m downhole depth). The Enioda resource continues to grow and consolidate with a number of significant mineralised intercepts being reported in Q3, including 13m at 3.6 g/t (from 70m downhole depth),11m at 3.3 g/t (from 17m downhole depth) and 4m at 16.1g/t (from 21m downhole depth). Q4 drilling will focus on completing the resource upgrade on Souwa and Nokpa. All the results will be submitted for the resource estimation and optimisation studies. Below is a table of significant Doropo drill intercepts reported during the quarter. Table 4. Doropo Project Exploration Significant Drill Intercepts (0.5 g/t cut off) Q3 Highlights TENEMENT ID PROSPECT ID HOLE ID From To Interval (m) Grade (Au g/t) DANOA Enioda DPRC DANOA Enioda DPRC DANOA Enioda DPRC DANOA Enioda DPRC DANOA Enioda DPRC DANOA Enioda DPRC DANOA Enioda DPRC DANOA Enioda DPRC DANOA Enioda DPRC DANOA Enioda DPRC DANOA Enioda DPRC DANOA Enioda DPRC KALAMON Chegue Main DPRC KALAMON Chegue Main DPRC KALAMON Chegue Main DPRC

12 EXPLORATION REVIEW KALAMON Chegue Main DPRC KALAMON Chegue Main DPRC KALAMON Chegue Main DPRC KALAMON Chegue Main DPRC KALAMON Chegue Main DPRC KALAMON Chegue Main DPRC KALAMON Chegue Main DPRC KALAMON Chegue Main DPRC KALAMON Chegue Main DPRC KALAMON Chegue Main DPRC KALAMON Chegue Main DPRC KALAMON Chegue South DPRC KALAMON Chegue South DPRC KALAMON Chegue South DPRC KALAMON Chegue South DPRC KALAMON Chegue South DPRC KALAMON Chegue South DPRC KALAMON Chegue South DPRC KALAMON Hinda DPRC KALAMON Hinda DPRC KALAMON Hinda DPRC KALAMON Hinda DPRC KALAMON Kekeda DPDD KALAMON Kekeda DPDD KALAMON Kekeda DPRC KALAMON Kekeda DPRC KALAMON Nokpa DPRC KALAMON Nokpa DPRC KALAMON Nokpa DPRC KALAMON Nokpa DPRC KALAMON Nokpa DPRC KALAMON Nokpa DPRC KALAMON Nokpa DPRC KALAMON Nokpa DPRC KALAMON Nokpa DPRC KALAMON Nokpa DPRC KALAMON Nokpa DPRC KALAMON Nokpa DPRC KALAMON Nokpa DPRC KALAMON Nokpa DPRC KALAMON Nokpa DPRC KALAMON Nokpa DPRC KALAMON Nokpa DPRC KALAMON Nokpa DPRC KALAMON Nokpa DPRC

13 EXPLORATION REVIEW KALAMON Nokpa DPRC KALAMON Souwa DPRC KALAMON Souwa DPRC KALAMON Souwa DPRC KALAMON Souwa North DPRC KALAMON Souwa North DPRC KALAMON Souwa North DPRC KALAMON Tchouahinin DPRC At the regional scale, the auger program completed on the Tehini 1 and Tehini 2 permits has confirmed the in situ mineralised structure, along approximately 8km of strike. This anomaly is well correlated with a strong magnetic feature and is scheduled drill tested by RC in Q4. The detailed surface geochemical program will continue in Q4 into the Kalamon and Danoa permits. PEA Update The PEA remains on schedule for completion by H The geotechnical and hydrogeology studies were completed in Q3 and did not raise any areas of concern. The metallurgical study is awaiting the final reporting of the 10kg Bottle Rolls and Column Leach test work on the upper and lower oxide material from the deposits. Centamin is working with Digby Wells Environmental ( Digby Wells ), to assist with the PEA study and assist in the execution of wider social initiatives throughout the Group. ABC Archaean-Birimian Contact Project We have defined two priority prospects on the Lolosso corridor for resource drilling the Central Zone and the Southern Zone. Both outcrop at surface. Work has subsequently infilled the rest of the structure with soils in the residual regolith and auger drilling in the areas of transported alluvium. The Southern Zone hosts a 2km by 100m wide mineralised, west dipping shear package, which has produced the majority of the better intercepts reported in from the ABC Project. The Central Zone is currently drill defined over a similar strike length of 2km but is nominally wider at an average width of 200m and is generally lower grade. The mineralisation in both areas is open and the strike length between the two prospects is geochemically anomalous but currently undrilled. A total of 4,589m of RC and 2,177m of diamond drilling was completed for the quarter. The drilling completed until the end of Q3 covers the majority of the Southern zone with 100m spaced sections (that will be infilled in Q4). The mineralisation is hosted by psammitic facies, sandwiched between calc-silicates to the West in the hanging wall and a progressively gneissified foot wall to the east. Some of the representative intercepts include 30m at 1.5 g/t, 100m at 0.8 g/t and 44m at 2.5 g/t. The Central zone is currently drill tested on 200m and 400m spaced drill sections. The lithological profile is similar to the Southern zone with calc-silicate hanging wall and gneiss footwall with a further interbedded quartzitic facies that also hosts mineralisation. One sample of the Fresh ABC ore was composited from drill core from the Southern Zone and sent to AMMTEC for metallurgical characterisation in Q2. Results received in Q3 indicate the fresh material is non-refractory with the total gold extraction, following a simple gravity-direct feed CIL process, of 88.9%. The QEMSCAN report indicates the gold deportment is primarily free and structurally hosted within micro-fractures in the arsenopyrite and pyrite. No significant gold is locked in the sulphides or quartz. Below is a table of significant ABC drill intercepts reported during the quarter. Table 5. ABC Project Exploration Significant Drill Intercepts (0.3 g/t cut off) Q3 Highlights TENEMENT ID PROSPECT ID HOLE ID From To Interval (m) Grade (Au g/t) KONA Lolosso KNDD KONA Lolosso KNDD KONA Lolosso KNDD KONA Lolosso KNDD KONA Lolosso KNDD KONA Lolosso KNDD KONA Lolosso KNDD

14 EXPLORATION REVIEW KONA Lolosso KNDD KONA Lolosso KNDD KONA Lolosso KNDD KONA Lolosso KNRC KONA Lolosso KNRC KONA Lolosso KNRC KONA Lolosso KNRC KONA Lolosso KNRC KONA Lolosso KNRC KONA Lolosso KNRC KONA Lolosso KNRC KONA Lolosso KNRC KONA Lolosso KNRC KONA Lolosso KNRC KONA Lolosso KNRC KONA Lolosso KNRC KONA Lolosso KNRC KONA Lolosso KNRC After the first pass auger reconnaissance drilling completed in Q2, we commenced to infill the auger starting in the south in Q3. The auger drilling was stopped in August due to the wet season. The auger program will resume at the end of Q4. Results received highlight the strike continuity between the prospects and beyond. The auger drilling and soils sampling has defined a coherent anomalous corridor with targets located on each of the gneissic contacts and on, what are interpreted from the coincident GAIP to be, an anastomosing array of intervening facies-shear contacts. A significant number of new targets are expected to be developed with the on-going surface geochemical program. Drilling will continue in Q4 with a focus on delivering a maiden ABC resource by end of year. Burkina Faso The Group s Batie West project in south-west Burkina Faso comprises one exploitation (mining) licence and nine exploration permits (including one permit for which notification of grant has been received) which cover a total of approximately 1,100km 2. The 64km 2 Konkera exploitation permit holds a NI compliant Indicated resource of 1.9Moz at a grade of 1.7g/t in addition to Inferred resources of 1.3Moz at a grade of 1.7g/t. Beyond Konkera, the Group s drill programmes have identified significant additional potential resources across the exploration areas, most notably at Napelapera (ca.10km south of Konkera), and Wadarado (ca. 35km north of Konkera). There were zero lost-time injuries across all project areas in Burkina Faso during Q3. The Group undergoes regular routine training and a focus on leading indicators to maintain the highest standards of health and safety. No material operational updates for the quarter. 14

15 FINANCIAL REVIEW The condensed consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ( IFRS ) as adopted for use by the European Union and in accordance with the Companies (Jersey) Law Now in its ninth year of production, Sukari remains cash generative and this is reflected in the Group s financial results for the nine months : Revenue of US$421.5 million, a 13% decrease compared to the nine months ( YoY ) (nine months : US$485.1 million); Gold sales of 328,433 ounces (excl. 7,038 ounces attributable to Cleopatra), a 15% decrease YoY. Average realised gold price of US$1,281 per ounce approximately 2% increase YoY; EBITDA (1,2,4) of US$178.5 million, a 15% decrease YoY as a result of lower revenue, lower cash costs of production lower other operating costs offset by an increase of 8% in exploration and evaluation costs, please note the change in accounting policy where all greenfield exploration costs are now being expensed as incurred; In line with the Group s updated accounting policy, operating costs include greenfield exploration expenses of US$16.5 million ( figures have been restated to include US$15.3 million of exploration expenditure); Profit before tax (4) of US$102.2 million, a 21% decrease YoY, due to the factors outlined above; Basic earnings per share after profit share (2) ( EPS ) of 4.80 US cents, a 5% increase YoY, due to lower revenue, lower cost of sales, lower other operating costs and lower profit share partially offset by an increase in exploration and evaluation costs (nine months : 4.60 US cents); Operational cash flow of US$150.0 million, a 35% decrease YoY, due to decreased revenues and higher cash operating costs per ounce sold; Free cash flow (1) of US$35.1 million generated, down 64% YoY (nine months : US$96.5 million) due to the impact of the factors outlined above; Cash costs of production (1,2) of US$206.8 million, a 11% decrease in cost profile YoY, resulting in a unit cost of US$631 per ounce produced, a 6% increase YoY; AISC (1,2) of US$301.2 million, a 4% decrease YoY, resulting in a unit cost of US$917 per ounce sold, a 13% increase YoY, mainly due to higher unit production costs, higher sustaining capital costs resulting from the scheduled fleet rebuild programme and underground mine development and lower gold ounces sold YoY; Royalties of US$12.9 million to Arab Republic of Egypt ( ARE ) and profit share (1) of US$49.8 million paid to Egyptian Minerals Resources Authority ( EMRA ), our state partners; Gross capital expenditure of US$75.7 million, a 29% increase YoY, in line with the US$103 million (4) expected for the full year; Cash and liquid assets (1,3) of US$292.2 million at, the Company remains debt-free and unhedged; and Consistent with the dividend policy, the Board paid an interim dividend of 2.5 US cents per share ( Interim Dividend ) on 28 September, US$28.9 million, equivalent to returning 80% of free cash flow generated in H1. (1) Cash cost of production, AISC, EBITDA and cash, bullion on hand, gold sales receivables, financial assets at fair value through other comprehensive income and free cash flow are non-gaap measures, please refer to pages (2) Basic EPS, EBITDA, cash cost of production and AISC reflect a provision against prepayments to reflect the removal of fuel subsidies which occurred in January 2012 (refer to note 8 of the financial statements for further details). (3) Cash and cash equivalents, bullion on hand, gold sales receivables and financial assets at fair value through other comprehensive income. (4) The Group accounting policy for greenfield exploration expenditure, has been updated in line with market practice. For full details, please refer to Note 1 of the Financial Statements. Centamin remains committed to its policy of being 100% exposed to the gold price through its unhedged position, and maintained a healthy cash, bullion on hand, gold sales receivables and available for sale financial assets balance of US$292.2 million, as at, after the interim dividend pay out of 2.5 US cents per share which equates to US$28.9 million on 28 September. Revenue Revenue from gold and silver sales for the period decreased by 13% to US$421.5 million (US$485.1 million in nine months 30 September ), with a 2% increase in the average realised gold sales price to US$1,281 per ounce (US$1,254 per ounce for the nine months ) and a 13% decrease in gold sold to 335,470 ounces, including 7,038 ounces attributable to Cleopatra (386,237 ounces in the nine months ). Cost of sales Cost of sales represents the cost of mining, processing, refining, transport, site administration, depreciation, amortisation and movement in production inventories. Cost of sales is inclusive of US$33.1 million categorised as fuel pre-payments (refer to Note 8 of the financial statements for further information) and is down 9% compared with the nine months to US$285.2 million, mainly as a result of: A positive movement in inventory adjustment of US$32.7 million compared to negative movement in inventory adjustment of US$1.4 million in the nine months reflecting the significant increase in ore stockpiles over the year to date; 3% increase in total mine production costs from US$232.3 million to US$238.3 million, due to a 7% increase in mined tonnes combined with a 5% increase in processed tonnes and an increase in unit costs mainly due to increased fuel and reagent costs; 2% decrease in depreciation and amortisation charges from US$81.5 million in the nine months to US$79.6 million at due to lower production effecting amortisation rates and US$44.5 million of additions (excl. capital work in progress) which increased the associated amortisation charges; and 15

16 FINANCIAL REVIEW The positive impact on unit costs of production has been predominantly driven by the increase in ore stockpiles. As per Note 7, the processing of ore in stockpiles occurs in accordance with the Life of Mine (LoM) processing plan based on the known mineral reserves, current plant capacity and mine design. Ore tonnes contained in the stockpile which exceed the annual tonnes to be milled as per the mine plan in the following year, are classified as non-current in the statement of financial position. Other operating costs Other operating costs comprise expenditure incurred for communications, consultants, directors fees, stock exchange listing fees, share registry fees, employee entitlements, general office administration expenses, the unwinding of the restoration and rehabilitation provision, foreign exchange movements and the 3% production royalty payable to the ARE. Other operating costs decreased by US$5.7 million or 21% from US$27.0 million in the nine months to US$21.2 million in the nine months, mainly as a result of: US$3.4 million increase in net foreign exchange gains (-ve); US$1.6 million decrease in royalty paid to the government of the ARE in line with the decrease in gold sales revenue (-ve); US$3.7 million decrease in inventory obsolescence costs (-ve); US$2.7 million increase in corporate and other costs (+ve) mainly due to increased payroll and compliance costs; and US$0.3 million increase in other expenses (+ve). Exploration and evaluation expenditure Exploration and evaluation expenditure comprise expenditure incurred for exploration activities in Côte d Ivoire and Burkina Faso. Exploration and evaluation costs increased by US$1.2 million or 8% from US$15.3 million in the nine months to US$16.5 million in the nine months. These expenses are now shown on the income statement after the change in accounting policy regarding the treatment of Greenfield exploration and evaluation costs, please refer to note 1 of the financial statements for the change in accounting policy regarding exploration and evaluation expenditure. Finance income Finance income comprises interest income applicable on the Company s available cash and term deposit amounts. The movements in finance income are in line with the movements in the Company s available cash and term deposit amounts. Profit before tax As a result of the factors outlined above, Centamin recorded a profit before tax for the nine months of US$102.2 million (nine months : US$130.0 million). Tax The group operates in several countries and, accordingly, it is subject to the various tax regimes in the countries in which it operates. The tax expense of US$0.01 million for the nine months was associated with timings in income taxes provisions and charges. EMRA profit share During the nine months, US$49.8 million was paid as profit share payments to the Egyptian Mineral Resources Authority ( EMRA ). Profit share payments made to EMRA, pursuant to the provisions of the Concession Agreement, are recognised as a variable charge in the income statement (below profit after tax) of Centamin, resulting in a reduction in earnings per share. The profit share payments during the year will be reconciled against SGM s audited June financial statements. Any variation between payments made during the year (which are based on the Company s estimates) and the audited financial statements, may result in a balance due and payable to EMRA or advances to be offset against future distributions. Earnings per share Earnings per share (after profit share) of 4.80 US cents for the nine months increased by 5% when compared with the same period in of 4.60 US cents. The increase was driven by the factors outlined above. Comprehensive income Other comprehensive income movement was the result of the revaluation of financial assets at fair value through other comprehensive income to US$nil. Financial position Centamin has a strong and flexible financial position with no debt, no hedging and cash, bullion on hand, gold sales receivables and financial assets of US$292.2 million at ( : US$345.8 million). 30 June US$ 000 US$ 000 US$ 000 Cash and cash equivalents (note 20) 254, , ,003 Bullion on hand (valued at the period-end spot price) 23,948 11,565 14,858 Gold and silver sales debtor (note 6) 14,184 8,926 17,803 16